Nile Breweries raises tetchy land question over Mbarara project

There was a time when residents of Ruharo in Mbarara district enjoyed a nice, quiet life.

From the gushing sounds of the nearby River Rwizi to the chirping echoes of the birds on the trees along narrow pathways, Ruharo exuded calm and peace – unlike the hustle of the bustling Mbarara town two miles away. Ruharo was a place where one would like to build a nice hushed country home.

Not anymore. A massive $80m plant on the banks of River Rwizi by Nile Breweries, a subsidiary of the global beer giant SAB Miller Plc, is nearing completion, with the official launch due in months. But while some residents are ecstatic about the project’s commercial benefits, others curse the plant as a major disruption.

“People in other areas admire us,” says Kiyanja LC1 Chairman Felly Kabagambe. “Everything is okay. They [the workers at the Nile Breweries plant] pay very well for accommodation. In fact rent has gone up by about 50% [since the project started] around here.”

Kabagambe’s lodges in Ruharo are usually fully-booked because of the influx of workers at the new beer plant. With the money, he hardly has any worries – not utility bills, not school fees.

It is not just Kabagambe cashing in. Some residents have vacated their houses and rented them out to workers at the Nile Breweries plant. And according to Florence Bashabe, the secretary of the Mbarara municipality Social Services committee, there are fewer idle youth in Ruharo today.

“Many casual labourers have been employed. Local women are making money by cooking food for the workers. The shops are also making money,” Bashabe said.

Bitter beer taste

Nile Breweries embarked on the Ruharo project in 2012, aiming to boost its current annual capacity of 180 million litres. The company says Uganda’s beer market is growing at more than 28% a year, as the population grows and more Ugandans graduate from cheap, crude gin to high-end beer.

The Ruharo plant will produce 65 million litres annually, with capacity to raise that to another 180 million litres. Yet these grand figures do not excite Edward Mugume Tabaro, James Kapere, and Chris Mwesigye. They are among Ruharo residents highly critical of the Nile Breweries project.

In a joint protest letter to the Town Clerk, Mbarara Municipal Council and also copied to Nile Breweries, written late last year, they said: “Ruharo Rwizi has always been one of the prime residential areas of Mbarara municipality. The residents have taken pride in ensuring a safe, serene and organized neighbourhood for many Mbarara residents.”

Residents are also worried about something else.

“We have fears that River Rwizi, which serves as a life stream for our community and Mbarara town at large, through its provision of fresh water for our home consumption and livestock, is likely to be degraded by the developer’s effluent when the beverage production begins…,” the trio wrote.

Nile Breweries says it “shall work to produce more beer but using less water.” The Jinja plant uses only 4.6 litres of water to produce one litre of beer, while the Mbarara plant will use 3.5 litres of water. A draft Environment and Social Impact Assessment report, prepared by AWE Environmental Engineers, for Nile Breweries Limited, appears to have compounded the fears over River Rwizi, though.

The June 2012 report borders on damning – although it proposes mitigation measures for Nile Breweries to contain any negative impacts.

“Given its [the factory’s] vicinity to River Rwizi, if improper handling of waste occurred, the impact severity is assessed to be high.”
The report also addresses the location.

“The establishment of the brewery in a prime residential area is likely to transform the fabric of the current community mix. Hitherto the area has been one of the best environmental-friendly residential areas in the municipality,” the report notes.

“With the coming in of a brewery at a time when economic pressures are at their highest, there is a possibility of some people selling off their land to commercial developers to take advantage of the high prices being offered because of the factory,” it adds.

Actually, Bashabe says that land that stretches about 50 feet by 100 feet now costs about Shs 50m ($18,800) in Ruharo, up from Shs 8m ($3,000) before the Nile Breweries project started.

The EIA report, nevertheless, predicts “the displacement of homeowners by retail commercial developments.”

It adds: “As this trend sets in, the possibility of a sprouting slum in Rwizi and Ruharo wards is very high unless specific and timely measures are put in place to prevent it.” Perhaps, the report’s most damning statement over the project is that “Sacrificing a prime residential area for commercial gains might lead to an undesirable situation that might be more costly for the municipality in future.”

Balancing act

The Nile Breweries project, with all the opportunities and fears, symbolizes a critical balancing act for the country. While it represents a dramatic economic transformation for a poor area like Ruharo, it also breaks up the social setting of an area, with some residents already complaining that the influx of labourers has fuelled crime.

Large investments are taking root in Uganda, meeting community resistance in some areas, while at the same time receiving the government’s blessing. Examples of such land disputes stretch far and wide. Sugar Corporation of Uganda, a subsidiary of the Mehta group, has been offered hectares of Uganda’s biggest rain forest, Mabira, to grow more sugarcane despite public protests.

Saudi Arabia’s royal prince Al Waleed Bin Talal, one of the richest men in the world, was given prime land in the heart of Kampala to build a hotel ahead of the 2007 Commonwealth Heads of Government Meeting in the city. The public protested the manner in which such land was given out. To this day, there is no hotel at the place.

Germany’s Neumann Kaffee Gruppe has been involved in a land dispute over its Kaweri coffee plantation in Mubende district, with some residents accusing the company of encroaching on their land. An independent surveyor’s report released two months ago, however, appears to have cleared the Germans of any encroachment.

The Nile Breweries plant is not expected to get any protests from government. The brewery industry is one of the largest taxpayers in the country.

Official tax figures for the year ending 2007, the latest available data, showed that Uganda Breweries and Nile Breweries took up the fourth and fifth position of the country’s top taxpayers. According to its own figures, Nile Breweries notes that it contributed $49.5 million to Uganda’s economy, out of a total $126.1 million in revenue in 2010.

The new Nile Breweries plant will also support farmers in the western Uganda, who will grow sorghum to supply the company.

Willing seller...

The controversy surrounding the Nile Breweries plant represents a spectacle that is rarely debated in the public realm: whether investors, such as Nile Breweries, should be allowed to purchase huge chunks of land for large projects that will likely disrupt the lives of the neighbouring households, and put the environment at risk, at the altar of job creation and tax revenues.

While many investors have received prime land on a silver platter from the government, Nile Breweries purchased the land through a willing-seller-willing-buyer basis. From various options, the company decided to buy 30 acres of land from Mzee Phinehas Nyenda in Ruharo.

The new Land Policy, which is before Parliament, under section 90, calls for the protection of the land rights of communities in the face of investments. The policy advises the need for community consultation, and putting in place mechanisms to listen to grievances.

One resident of Ruharo, who requested anonymity, accuses Nile Breweries of not consulting the communities before embarking on the Ruharo project. “They only spoke to the communities after they had started. We have tried to talk to them to settle this amicably but they keep ignoring us,” he said.

The resident said: “We don’t want the brewery to use the existing “Spencon road” as their main artery to the brewery because with an average of 10-15 trucks plying the road, through our houses, the place will not only lose value but will also turn into an industrial area,” he said.

“Also, where the Spencon Road joins the main road would be a potential traffic hazard because of the sleight of the land,” he added.

Attempts to get a comment from Nile Breweries’ publicists were futile as the response to this article failed to get top management approval by press time. Robert Kitimbo, an independent land surveyor, who has carried out work on behalf of the Uganda Investment Authority, believes the law that allows anyone to sell land anyhow should be revisited.

“Ideally a residential area should stay residential,” he told The Observer. “It’s unfair to come back home to rest and find a factory making noise and emitting smoke.”

Kitimbo offered an example of how a certain landlord in Njeru was forced to evict the Asian owner of a smelting plant, whom he had sold some piece of land, after failing to get customers to buy the remaining pieces of land simply because of the nearby plant.

He says that while the laws might be in place, “it is difficult to dictate to whom he or she should sell the land.”

A law that clearly spells out a building plan of an area would solve this problem. Efforts to streamline Uganda’s land systems are ongoing, although these efforts point more to easing land acquisitions than creating a semblance of order on land use.

For example, IGN France International, an international consortium, is engaged in the Design, Supply, Installation, Implementation of the Lands Information System and Securing of Land Records project in Uganda. This process involves scanning all paper files and creating a computer database. The purpose of the project is to modernize land records and reduce disputes.

For the aggrieved residents of Ruharo, all these efforts are simply a smokescreen, one that does not mirror the kind of dilemma they find themselves in.


© 2016 Observer Media Ltd